Mercedes-Benz warns two German plants could close if cost talks fail

A conditional warning over two plants

Mercedes-Benz has warned employees that it may have to close one vehicle assembly plant and one powertrain plant in Germany if it cannot agree on cost reductions. Production chief Michael Schiebe delivered the warning at a staff meeting in Sindelfingen on 21 September. DPA reported that a company spokesman confirmed his remarks. Schiebe said retaining every German site remained the company’s aim and called for cost-saving measures acceptable to both sides. No closure decision was announced. ⁶⁷

Mercedes-Benz has also said it needs conditions that improve productivity in Germany, according to a company statement reported by CarExpert. Motor1 reported on 23 September that the company had named no sites and given no timetable for potential closures. The warning specifies the types of facility that could be affected, not a publicly identified plant or a scheduled shutdown. ¹⁵

The German sites in question

DPA identified Mercedes-Benz’s German vehicle assembly locations as Sindelfingen, Rastatt and Bremen. It listed seven powertrain locations: Untertürkheim, Affalterbach, Berlin, Hamburg, Kamenz, Kölleda and Arnstadt. Schiebe’s warning concerns one site from each category, rather than two assembly plants or two powertrain plants. ⁶

Business Insider Polska reported on 28 September, citing German broadcaster NDR, that Bremen and Hamburg might be affected. That remains a reported possibility, not a designation by Mercedes-Benz: Motor1 said none of the German locations had been confirmed or ranked as a closure candidate. Business Insider Polska, citing company information, put employment at Bremen at about 10,500 and Hamburg at about 1,900 at the end of 2025. Those workforce figures are not estimates of potential job losses. ²⁵

Cost measures and worker opposition

The plant warning comes amid a wider German cost-cutting drive. DPA reported that Mercedes-Benz had announced a productivity drive and that its executive board proposed employees work more for the same pay. The Auto Wire reported on 25 September that the board launched the drive in June 2026, with proposals including faster processes, leaner structures and more working hours without additional pay. ⁶⁷

The Auto Wire also reported a concrete change to a scheduled worker payment: Mercedes-Benz deferred the so-called transformation component, due in July 2026, to 2027. The publication said the company was reviewing other pay components and special payments. Those reported measures should be distinguished from the further cost reductions Schiebe said management and workers still needed to agree. ⁷

Worker representatives have challenged the closure warning. Carscoops reported that IG Metall opposed the use of potential plant closures to press employees for concessions. Index.hr identified Mercedes-Benz’s central works council as also objecting to a choice between concessions and closures. The two accounts concern responses from worker bodies, not an agreement to the proposed cost measures. ⁴³

Schiebe’s remarks coincided with wider protests by automotive workers in Germany. DPA reported that IG Metall said about 175,000 employees took part in rallies at 280 locations, calling on major carmakers, including Mercedes-Benz and Volkswagen, to secure jobs and provide a future for their work. ⁶

Financial and production context

The Auto Wire, citing Mercedes-Benz’s second-quarter interim report, said Mercedes-Benz Cars sold 98,624 vehicles in China during the quarter, down 30 per cent, and recorded €752 million in impairments on Chinese joint-venture stakes. It reported second-quarter divisional earnings before interest and tax of €49 million on nearly €23 billion in revenue. Its account put adjusted return on sales, which excludes one-off items, at 4.0 per cent, down from 5.1 per cent a year earlier. ⁷

Carscoops reported that US tariffs cost Mercedes-Benz US$1.1 billion in 2025. Those figures describe pressures on the business, but they do not change the condition Schiebe attached to keeping the German sites: agreement on measures to lower costs. ⁴

A change from the earlier factory position

The warning differs from the position described in Mercedes-Benz’s early-2025 cost plan. Index.hr reported that the company then aimed to reduce production costs by 10 per cent by 2027 while expressly saying it had no plans to close German factories. Schiebe’s September warning introduces closures as a possible consequence if acceptable savings cannot be achieved, while retaining all German sites remains the stated goal. ³⁶

Investment in German production has continued. Index.hr reported that series production of the new GLA began at Rastatt shortly before Schiebe’s warning, following an investment there of between €100 million and €300 million. That investment does not establish which, if any, site could be affected by a future closure decision. ³